Tesla shareholders have voted to reinstate CEO Elon Musk’s $56 billion pay package and relocate the company’s state of incorporation from Delaware to Texas. The vote took place during Tesla’s annual shareholder meeting held in Austin, Texas.
The controversial pay package, initially approved in 2018, was voided by a Delaware judge in January. The judge ruled that Tesla’s board failed to disclose potential conflicts of interest and did not adequately inform shareholders about the company’s progress toward performance-based goals. Despite this ruling, the shareholder vote to reinstate the package indicates strong support for Musk.
Musk’s compensation plan includes no salary or bonus but offers stock options tied to Tesla’s market value, which has reached up to $650 billion over ten years. Although initially valued at $56 billion, Tesla cited the plan’s value as $44.9 billion in a recent proxy statement due to stock price fluctuations.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 182.47 | +5.18 | +2.92% |
During the meeting, Musk expressed gratitude to the shareholders, stating, “Hot damn, I love you guys!” He had previously hinted at the likely approval of both proposals by posting a graph on X (formerly Twitter) showing favorable vote counts.
The decision to move Tesla’s incorporation to Texas aligns with Musk’s previous calls to leave Delaware. The move also received endorsement from Texas Governor Greg Abbott, who welcomed Tesla to a state with no personal or corporate income tax.
The reinstatement of Musk’s pay package was opposed by several proxy advisory firms, including Glass Lewis and Institutional Shareholder Services, as well as the California Public Employees’ Retirement System (CalPERS) and New York City Comptroller Brad Lander.
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However, supporters like Florida’s pension board and prominent investor Ron Baron backed the proposal, with Baron Capital’s Christopher Tsai emphasizing the shareholders’ trust in Musk and Tesla. Tesla’s stock rose 2.92% during Thursday’s trading session and 0.71% in after-hours trading, although it remains down by about 26.5% for the year 2024.
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